MUMBAI: In a bid to revive slowing sales growth after it posted a weak fourth quarter results, retail chain Shoppers Stop is looking to build growth through a stronger online presence -one that will be driven by private labels and exclusive brands.

On a company level, the chain clocks gross margins to the tune of 33%. While the contribution of private brands, like Stop, Life, Haute Curry, Vittorio Fratini, Eliza Donatein and Kashish, is 11.5% of sales, exclusive brands contribute 4.1%. The exclusive brands it sells include Wrogn by Virat Kohli, Desigual, the Spanish fast fashion brand, and Imara by Shraddha Kapoor.

The company recently launched Rheson, the brand promoted by Sonam and Rhea Kapoor, exclusively across both its offline and online platforms. The push towards private labels and online presence comes after the modern retail chain saw sales from private brands decrease by 5.4% in the quarter gone by.

“Exclusive and private brands will drive the online customer base especially from smaller cities where we are not physically present,“ said Shrikhande. The K Raheja Corp-promoted retailer operates 81 stores in 37 cities and has downsized its unprofitable stores (10% of bottom stores) as reported by ET in March. The move helped the retailer curb operating expenses by 50 basis points in Q4 of FY17.

With competition from online ecommerce players weighing heavily on Shoppers Stop, Shrikhande said the company will focus aggressively on enhancing its online play in the coming year with an investment corpus of Rs 60 crore having been carved out for online operations alone.

“We have spent Rs 45 crore of the planned Rs 60 crore for ecommerce expansion. The remaining Rs 15 crore will be completely spent this year (FY18),“ he said. Revenues from online sales currently form only 1% of Shoppers Stop's total revenues but the company is looking to enhance this contribution significantly. “In three ye ars, our online sales should form 10% of our overall sales,“ he said. Currently, 70% of the retail chain's 400 brands are avai lable across its offline and online spread.

By the second half of FY18, the company will make all brands available across stores and its online platform with 5-10% of brands being made available exclusively online. Shoppers Stop posted a weak fourth quarter with a `36 crore loss as it recognised an impairment for reduction in the value of its investment in subsidiary HyperCITY Retail (India).

"Losses of Hypercity Retail, a subsidiary company, have substantially eroded its net worth,” the notes to its financial statement had said. The retail chain’s online push will include the beleaguered HyperCITY as well.

HyperCITY, which has been piloting ecommerceoperations for over a year in a bid to revamp its operations, is expected to launch the online business by June end. The launch was earlier planned for March. Shoppers Stop is also looking to introduce subscription-based delivery services for HyperCITY’s grocery business once the ecommerce operations kick-start.